A MAJOR building society is hiking the fee on one of its most popular current accounts.
Nationwide is increasing the charges on its FlexPlus packaged bank account, which offers additional services and perks.
These benefits include worldwide travel insurance, mobile phone insurance, breakdown cover, and preferential rates on loans and overdrafts.
Currently, FlexPlus customers pay £13 a month or £156 a year for these benefits.
The account does not require a minimum pay-in, and customers get worldwide travel insurance for family trips of up to 31 days.
Mobile phone insurance is also provided for all members in the same household, and it covers for loss, theft, damage and faults,
Additionally, account holders can use their debit card abroad without incurring non-sterling transaction fees.
FlexPlus customers also get vehicle breakdown cover in the UK and the rest of Europe even if somebody else is driving.
However, from December 1, the FlexPlus monthly fee will rise from £13 to £18 a month – or £156 a year to £216 a year.
This represents a £60 a year increase compared to the current fee charged for the product.
A spokesperson for the building society said: “We have held back raising the fee for FlexPlus since 2017.
“However, the rising cost of insurance means we now need to make changes, taking effect from December.
“Even after this change, FlexPlus will continue to be one of the UK’s most competitive packaged current accounts, both in price and quality of cover.”
Travel insurance, mobile phone insurance, and breakdown cover have all increased significantly over the five four years.
That’s because providing cover costs more, for a number of reasons, including higher medical costs abroad, more frequent claims, and the impact of global events like the COVID-19 pandemic.
For example, in April, the ABTA’s research highlighted how medical repatriation costs have more than doubled since 2019.
More people are claiming their travel insurance, too, which can lead to higher premiums for all.
According to figures from the Association of British Insurers (ABI), insurers processed 574,000 travel insurance claims in 2023, with total payouts reaching £511 million.
That’s up from 362,000 claims in 2022, when total payouts amounted to £352million.
To take these rising costs into account, several major banks have adjusted their packaged bank account fees in recent months.
Nationwide’s FlexPlus currently outperforms similar offers from Co-op Bank and Halifax.
However, the NatWest Reward Silver account remains the cheapest on the market at £10 a month.
Lloyds Bank hiked its packaged bank account fees by £1.50 on July 1.
Before this, NatWest upped the fees on its Reward Black account from £31 to £36 per month, and the Reward Platinum £20 to £22 per month on June 28.
Separately, Barclays recently announced that it was scrapping its £5 monthly loyalty reward given to Blue Rewards customers.
While these accounts can offer convenience and potential cost savings, customers should assess whether the included benefits align with their needs and whether the fees justify the perks provided.
SWITCHING BANK ACCOUNTS
SWITCHING bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS).
Dozens of high street banks and building societies are signed up – there’s a full list on CASS’ website.
Under the switching service, swapping banks should take seven working days.
You don’t have to remember to move direct debits across when moving, as this is done for you.
All you have to do is apply for the new account you want, and the new bank will tell your existing one you’re moving.
There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account.
You should get in touch with your existing bank for any old statements.
When switching current accounts, consider what other perks might come with joining a specific bank or building society.
Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts.
And some banks offer free travel or mobile phone insurance with their current accounts – but these accounts might come with a monthly fee.
What other packed bank account options are there?
If you use package bank accounts correctly, they can save you £100s off the cost of breakdown, travel, mobile and gadget insurance.
When weighing up the value of these accounts it’s important to review the levels of cover offered and consider whether you will use all of the benefits included.
If not, then these may not be the best option for you.
Here’s some examples of the best package bank accounts currently available.
NatWest
NatWest offers existing customers the chance to upgrade their standard current account to a packaged product.
Its Reward Silver account costs £10 a month and offers European travel insurance for trips of up to 22 days.
Customers also get free mobile phone insurance and can use their debit card abroad without incurring extra charges.
Those looking for worldwide travel insurance can apply for a Reward Platinum account which costs £22 a month.
This account also includes UK breakdown cover.
To find out more, visit natwest.com/current-accounts/packaged-bank-accounts.html#compare-packaged-accounts.
Lloyds Bank
Club Lloyds Silver and Platinum members get access to a whole host of added extras.
The Club Lloyds Silver account comes with an £11.50 a month fee, as long as you pay in a minimum of £2,000 into the bank account each month.
If you don’t meet this requirement, you’ll be charged an extra £3 a month, taking the total account cost to £14.50 a month.
Customers get free mobile phone cover, Europe and UK family travel insurance and UK breakdown cover.
Customers can also choose an annual reward as standard, including 12 months of Disney+ and six cinema tickets.
It also offers fee-free spending and ATM withdrawals abroad (ATMs may charge their own fees).
The Club Lloyds Platinum account costs £22.50 a month and provides worldwide travel insurance as an added extra.
To find out more, visit lloydsbank.com/current-accounts/all-accounts/club-silver-account.
Virgin Money
Virgin Money‘s M Club packaged bank account is one of the cheapest on the market, costing £12.50 a month or £150 a year.
It comes with free gadget insurance, worldwide family travel insurance and UK and European breakdown cover.
The gadget cover protects both mobile phones and other tech, such as tablets and laptops.
Customers do not need to make a minimum monthly payment to qualify for the account.
According to the bank, equivalent policies would cost upwards of £500 a year, so customers save £350 with this account’s perks.
To find out more, visit uk.virginmoney.com/current-accounts/pca.
Co-op Bank
Co-op Bank’s Everyday Extra packaged bank account costs £15 a month or £180 a year.
This product offers worldwide family travel insurance for those up to the age of 79.
It also includes mobile phone and UK and European breakdown cover for the account holder.
Customers do not need to make a minimum monthly payment to qualify for the account.
To find out more, visit co-operativebank.co.uk/products/bank-accounts/packaged-bank-account.
Halifax
Halifax’s Ultimate Reward package bank account costs £19 a month or £228 a year.
Customers do not need to make a minimum monthly payment to qualify for the account.
The product comes with free gadget insurance, worldwide family travel insurance, UK breakdown cover and home emergency cover.
Customers can also receive additional rewards if they pay in at least £1,500 a month into the account.
You can choose from £5 a month cash, a Vue cinema ticket, or three digital magazines.
To find out more, visit halifax.co.uk/bankaccounts/current-accounts/ultimate-reward-current-account.